First, we can tell you what it’s NOT!

We often see accountants or CPAs offering “Tax Strategy” and all they are doing is telling you to spend all your money on stuff you don’t need at the end of the year. Or the flip side, where they are selling you on the idea that you can pay zero in tax by implementing their questionable high-risk strategy (which they charge you tens of thousands to create) to pay zero in tax.   

That is NOT tax strategy.

Strategy (noun) | /ˈstradəjē/ |  A plan of action or policy designed to achieve a major or overall aim.

Plan of action. Overall aim. In our opinion, that should consist of more than draining your bank account to buy office supplies you don’t need during the last week of December.

At Empowered Profit, we handle Tax Strategy a little differently. It’s so important to us that it is included in all of our service packages. It’s about the relationship you are developing with your tax process, as much as it’s about the actual tax bill you will be paying. 

We, of course, don’t want anyone paying anything more than they have to in taxes, and have strategies to support that – AND (as with all of our work) the mindset component is critical.  We want you to get to a place where you understand taxes, ask questions without fear, and treat your taxes just like any other bill in your business, without the unnecessary drama.  

Here’s a little more about our actual process:

👉 We start every client off with an initial review of their business. This includes looking at the previous year’s returns and records and their corporate structure and compliance.  

👉 From there, you work with our Tax Team to look at things that you can take as deductions and strategies you can put into place to reduce your tax bill.  We also look at recommendations for Quarterly Estimated Tax Payments, and a savings strategy to make sure you are putting enough away to cover the tax bills you will have from a successful business. 

👉 We also make sure you know all the deadlines that apply to your business. 

👉 We are educating you at every step so you can feel empowered about your business and your taxes.  We are tired of the rhetoric about taxes and the unnecessary stress & worry assigned to them. 

We also have a few other strategies up our sleeves, but we can’t give away all our secrets now, can we? 😊

Having a plan is just the first step.  Then throughout the year, we check in with you AND you can feel empowered to ask us questions because we include unlimited email and zoom support for you to do so.  We also send questions to YOU (because we know you don’t even know where to start or what questions to ask). Seriously, anytime you have a question about tax stuff, send it to us, and we will answer you.  And our answer won’t just be a link to an IRS webpage that is written in tax-talk, we will give you our blog posts, and our resources, and always offer a call to discuss it more to be sure you understand everything.   

Twice during the year, we have a tax projection process, when we will check in with you and see if anything has changed during the year.  Do we need to make changes to projections? Loss of income, a new stream of income, W2 job, birth of a child, divorce, marriage…all things that could affect your tax bill or tax filing. 

You see, this way, there aren’t tax time surprises.  You had an amazing $100k launch? AWESOME! And let’s make sure you are putting aside a little more for taxes so you aren’t caught off guard when it’s time to file.  

If you need this type of strategy for your business, book a call with our team.

So how can you get started with Tax Strategy? In order to get a great plan of action for you and your business, here are a couple of tips:

1. Work with an accounting team that really understands you and your business and speaks to you in a language you understand. No more fear or worry about what’s going to happen when you show up for your tax meetings or losing sleep because of the tax monster you fear is lingering under your bed. 
2. Prioritizing having tax conversations ALL year long, not just at tax time. Don’t be afraid to ask questions, and if the person you are working with makes you feel uncomfortable asking questions, it might be time to find new support. 
3. Participate with your Tax Team. An active partnership is so important and we love forming great relationships with our clients. Remember, ultimately no matter who you hire, you are the business owner and responsible for what happens in your business. Answer emails when you receive them, proactively reach out with questions, and ask about things if you are unsure. 

It’s fine to drop off your dry-cleaning, but don’t just drop off your taxes…

You shouldn’t work with a CPA to do your taxes where you walk in, place an envelope of all your papers on the counter and walk out.  Then you just anxiously await for them to tell you what you owe. You don’t get to ask questions (or maybe you get 1 hour – for your list of questions you’ve jotted down all year long). How could they possibly know your business and be able to give you the best advice? Oh, and by the time you drop off your taxes, it’s too late to implement any strategies, so you will end up with a high tax bill than necessary.

I know what you’re thinking, do I really have to talk about taxes ALL year long?

YES! And if it feels uncomfortable, we get it. But it can actually take some of the fear out of tax time because you already know what’s coming and can be prepared for it. You can work together on a plan for the year and take advantage of different strategies and savings. There are so many benefits to putting a tax strategy in place for the year and checking in on it periodically to make adjustments & calculations.

Not only do we recommend working with someone all year, but even better if it’s also someone who is taking care of your bookkeeping.  This can mean more deductions and more opportunities for better write-offs because you are already talking to that person all year. This means brainstorming how we can make the things you are already spending money on tax-deductible, rather than just spending for the heck of it. 

They have a really good idea of your business and what strategies might be available to you. 

They understand what you do and know what’s going on in your business. They are watching for things for you and also helping you watch out for things! This is so important because tax laws change and update and you want someone that knows what questions to ask you. 

The most important thing to remember is that your business is constantly changing and evolving. (And that’s why we love working with small businesses and online businesses!) But that means your Tax Strategy also needs to be updated and reviewed periodically throughout the year, with someone that you trust and who knows and understands your business. 

This is provided as information only and as a starting point for a conversation with your own legal and accounting team, this should not be considered legal or financial advice.

All of these decisions are based on a number of factors and we cannot guarantee that you will experience any specific results based on any information provided. Please speak with your own retained professionals to ensure that you are making the best decisions for your business & personal situation.

Please speak with your own retained professionals to ensure that you are making the best decisions for your business & personal situation.