Why Didn’t My Accountant Tell Me That?

One of the most important roles a tax advisor has is to provide their clients with answers to questions they didn’t even know they had.

Here’s an example.

One of the most popular questions I get is:

What type of entity should I form for my business/investing?

With a few follow up questions, most tax advisors will answer this question and the client will go on their way – happy to have an answer and anxious to get their entity formed.

Then, what usually happens, is the client starts to learn more things as they progress in their business or investing.  These may be things they should have been doing or should not have been doing, but they are all things they wished they would have known sooner.

Here are just a few examples:
Taking money out of the entity
The expenses that should be paid by the entity and the ones that should be paid personally
Transferring property (like real estate or a vehicle) into the entity
The above items all have significant tax implications, yet rarely are they addressed (in detail) as part of the initial question.  Sure, it may be mentioned that you need to pay yourself a salary or take distributions – but what does that really mean?  Do you know how much, how often and what additional filings are involved?

Eventually most people learn these details, but usually it is not until they are at a point where they wish they had known about them sooner, leading to the question:

Why didn’t my accountant tell me that?

Your tax advisor should anticipate what you don’t know to ask so you can leverage their knowledge and experience.

When a client comes to me or a member of the ProVision team with a specific question, like what type of entity to form, we typically find ourselves asking the client many more questions that cover bookkeeping, tracking expenses, business or investing operations, additional goals they have, estate planning and exit strategy (to name a few).

So be sure to leverage your tax advisor’s knowledge and experience so you can avoid common mistakes (that sometimes can set your business or investing back by years).

Focus on your wealth!
Tom Wheelwright Provision Wealth (Tom’s firm is my personal tax consultant)