One of the first questions I ask a new client is how often they meet with their tax CPA each year. In most cases, the answer is just once per year. That number should be three, even for small business owners.

The Three CPA Tax Meetings

Let’s assume tax compliance season is over. Your CPA filed your S corporation return well before March 15th, and your 1040 return was electronically submitted a few days later, well before the April 15th deadline. You slightly overpaid your taxes by about $2,000, which was applied to the following year’s tax liability.

Below are the three meetings you and your accountant should have:

June or July: This is a catch-up meeting for the CPA to determine how you are doing and if your safe harbor payments are consistent with your taxable earnings. During this meeting, the CPA will calculate your tax liability to determine how it compares to what you have paid to the IRS. This is a time for the owner to question the tax accountant and determine if any strategies to defer or avoid taxes are possible.
Early November: This is the last meeting of the year. It is the time for the CPA to determine last-minute tax deferment strategies. The meeting also serves as a pre-planning session on how paperwork will be submitted to the tax CPA by around January 20th. It is also the perfect time for the business owner to ask any remaining questions he/she has on his/her mind.
Late April: I call this the exit planning conference. The CPA reviews any unusual items detected during the tax compliance process with the business owner (there should be none because of the two meetings held previously). The tax preparer also reveals the over- or under-payment to the IRS. There should be few, if any, surprises regarding what is owed to the IRS.

The gap between the first two meetings is wide. Emails and short conversations are expected between those two meetings as tax questions arise from the business owner. That’s why this meeting count is only three, not more.

Are Three Meetings Too Many?

When I started my consulting practice, I observed three limitations between tax preparers and business owners:

There were never any meetings between the CPA and the owner. I later discovered this is common because tax CPAs struggle to focus on customer service. They are more reactionary than proactive. Today, some niche consulting firms teach CPAs how to run a customer-centric practice.
Many owners typically contact CPA firms in late December to learn how to save on their taxes. That’s too late. That question needs to be asked in May or before.
Where a controller exists in the small business, most are not proactive in informing their tax CPA of changes that could impact the year-end tax liability. I’ve never understood this limitation because controllers are the best intermediaries between business owners and tax accountants.

Don’t Forget Strategy

When I serve as the contract CFO of a small business, I take ownership of the tax relationship. I don’t mind if the business owner participates in the meetings, but it’s optional, and they prefer to stay out of the conversations.

I discuss the owner’s goals and objectives for the next three to five years with their tax CPA about every two years. I cannot stress this type of conversation enough. The output from these discussions is a roadmap on tax deferment, and avoidance that is generally only altered by new laws and regulations passed on Capitol Hill.

This meeting is even more critical if you are about ten years from retirement. I also want the owner’s financial advisor to participate in this meeting.

Summary and Guiding Principles

This entire tutorial hinges on three meetings with the tax accountant. Can we only have two meetings? Or how about four or five?

The guiding principle behind the three meetings is establishing a relationship with the accountant. Next, we want a general understanding of tax law fundamentals to ask better questions in future meetings.

The ultimate aim is peace of mind and confidence about our ongoing tax liability. We don’t have to enjoy paying taxes, but we can certainly begin to evaporate the dark clouds of tax uncertainty.

When I own the tax relationship with my clients, year one always includes no fewer than three meetings. In year two, the relationship shifts because we’ve established a strong rapport. In future years, my meetings will be on an as-needed basis as tax questions arise. I still have the planning meeting in November. Exit meetings in April are typically between the tax CPA and the business owner and handled by email.

If you are only used to having one meeting a year with the tax accountant, I recommend the three meetings to start building a basic tax acumen that impacts your wealth for you, your family, and the business team depending on you.

Bonus Tips

Are you still searching for ideas to discuss with your tax accountant when you meet outside of tax season? If so, you probably have the wrong professional on your wealth team.

Below are a few topics where your awareness level should be high, and some sound strategies should be in place. This list is for the owner searching for a new tax CPA, and the following items will serve as a punch list for future meetings:

Personal financial planning – most tax CPAs are not financial advisors. They don’t have time if they are trying to remain updated with ongoing tax law changes. However, they can play a key role with your financial advisor. If you meet with your financial advisor at least twice a year, consider including your tax accountant in the conversations.
Social Security—I will not say much on this topic as I have had some disagreements with a few tax CPAs regarding it. Financial advisors also address social security periodically with their clients. If this topic has not been discussed, add it to the list.
Charitable contributions – in my first W2 position, my employer had a three-person in-house tax staff. They also had a charitable foundation. Much of my thinking is based on this experience. This topic belongs on your list if you want to expand your charitable giving.
Healthcare and benefits – tax CPAs are not benefits experts. However, they have been exposed to many plans. They also know what’s deductible and not deductible. Consider adding this one to the list.
Real estate planning – this one is a given. Real estate questions are asked when the business owner already owns these assets. However, when the owner does not have a real estate portfolio, tax accountants know all the answers before you have even thought of the real estate questions to ask. Tax accountants generally have strong relationships with numerous attorneys, so they understand when/why real estate should be housed in its legal entity. If you currently lease your buildings and are considering expanding your wealth portfolio in local real estate investments, you must have this conversation with your tax CPA.
Saving for college – this is probably a 15-minute conversation. It’s probably a discussion your financial advisor has already addressed. I’d still add this topic to the list.
SALT – this term is short for state and local taxes. One of the largest firms I work with does a cursory review of local taxes paid when they are examining a new client’s prior-year tax return. Accordingly, this topic may arise early in a new tax CPA relationship. However, if you are considering starting another practice in a nearby state, you need/want their input regarding state and local taxes.
Executive compensation – as I’m writing this, I serve on one ESOP board and their Executive Compensation Committee. Thankfully, we have a great HR expert on this committee. Tax support is helpful in the area of deferred compensation, especially in the area of SARs and stock options. If I’ve lost you, don’t worry; this topic is typically for larger organizations. I’d be remiss if I did not include this topic on this list.
ERISA plans – closely related to executive compensation are ERISA plans for businesses of all sizes. This includes SIMPLE IRAs and 401k plans. Even though a third party other than a tax CPA will set these up, I’d still ask my tax CPA how these work before starting a new plan.
Estate planning—If you are in your 30s and think estate planning is unnecessary, think again. Some tax CPAs specialize in estate planning, while others play the role of quarterback in the process. Please schedule a meeting if you have never discussed estate planning with your tax CPA. Get the ‘thinking’ process started immediately.

Still have questions or need a sounding board? Drop me a line, and we’ll discuss it further.