The Best Time to Talk to Your CPA Is Before You Act
When to talk to your CPA? You may think about contacting your CPA when it’s time to file your taxes, respond to a tax notice, or get help with an accounting question. However, one of the best times to talk to your CPA is before you make a major financial decision.
Once you’ve completed a transaction, your CPA can explain the tax consequences and help you report everything correctly. When you reach out beforehand, you have more time to discuss your options, understand the potential tax implications, and consider whether additional pre-transaction tax planning could benefit you.
Talk to Your CPA Before Selling a Business
Selling your business may be one of the biggest financial decisions you’ll ever make.
The way you structure the sale, allocate the purchase price, and time the transaction can affect how much you owe in taxes. Your business entity type and other financial considerations can also influence the outcome.
That’s why you should talk to a CPA before selling your business. Your CPA can work with your attorney, financial advisor, and other professionals to help you understand the financial and tax implications before you finalize the agreement. Starting early gives you more time to consider your options and prepare for the transition.
Talk Before Buying a Business
Buying a business is an exciting opportunity, but it’s also a decision that deserves careful financial planning. When you talk to your CPA before buying a business, consider discussing these questions:
- How should you structure the acquisition?
- Are you purchasing business assets or ownership interests?
- How will you finance the purchase?
- What tax consequences should you anticipate?
- How might the acquisition affect your existing operations and cash flow?
Your CPA can help you evaluate these considerations while there’s still time to make adjustments. Instead of waiting until the closing documents arrive, involve your CPA early in the business acquisition process.
Talk Before Buying or Selling Real Estate
You should also talk to a CPA before buying or selling real estate, whether you’re purchasing an investment property or selling a commercial building. That’s because real estate transactions can have significant financial and tax implications.
Before signing an agreement, consider discussing the following with your CPA:
- Property basis and depreciation
- Potential capital gains taxes
- Ownership and entity structure
- Financing arrangements
- Estimated tax payments
- Available tax-deferral strategies
Depending on your situation, certain planning opportunities, including potential tax-deferral strategies, may depend on how and when the transaction takes place. Talking to your CPA before buying or selling real estate gives you time to understand these considerations and make more informed decisions.
Talk Before Making Major Changes to Your Business
As your business grows and changes, your financial and tax planning needs may change too. Always make it a point to tell your CPA about major business changes.
That means you should consider contacting your CPA before:
- Adding or removing a business owner
- Changing your business entity structure
- Expanding into another state
- Opening or closing a business location
- Making a major equipment or capital investment
- Taking on significant business financing
- Acquiring another company
- Restructuring business operations
- Beginning succession planning
- Preparing to sell or transition your business
These decisions can influence your taxes, cash flow, financial reporting, compliance responsibilities, and long-term goals. Proactive CPA guidance can help you understand how a planned change may affect your business before you commit.
Talk When Your Financial Situation Changes Significantly
You don’t need to be buying or selling something to benefit from a conversation with your CPA. Tell your CPA about major business changes, such as a major change in your income, revenue, or business profitability.
For example, if your business is performing much better than expected, your existing tax projections and estimated tax payments may need to be reviewed.
The same applies if your revenue or profitability decreases significantly. Keeping your CPA informed allows you to review your financial position, discuss potential adjustments, and plan based on your current circumstances.
Individuals and Families Should Communicate Too
Proactive tax planning isn’t just for business owners. Major personal and family decisions can also affect your financial situation and tax obligations.
Tell your CPA about income changes, which often involve situations like:
- Selling your home or an investment property
- Receiving a significant inheritance
- Preparing for retirement
- Exercising stock options
- Making a substantial investment transaction
- Establishing or modifying a trust
- Planning a major charitable contribution
- Moving to another state
- Experiencing a significant income change
- Making important estate-planning decisions
You don’t need to consult your CPA about every financial choice. However, if you’re making a decision that could have meaningful tax consequences, it’s worth asking whether there’s anything you should consider beforehand.
Why Waiting Can Limit Your Planning Options
Imagine you’re preparing to sell a building. You contact your CPA and say: “I’m thinking about selling my building. What should I consider?”
Now imagine having the same conversation after the sale: “I sold my building last year. What does that mean for my taxes?”
Both questions are important, but the timing makes a difference. Before the sale, your CPA may be able to help you evaluate different approaches and identify potential planning opportunities.
After the sale, many of those decisions have already been made. That’s the difference between proactive tax planning and addressing tax consequences after a transaction. The earlier you start the conversation, the more flexibility you may have.
Your CPA Can Help More When You Keep Them Informed
At Summit Point CPAs, we believe a strong client relationship depends on open, two-way communication. Our role includes keeping you informed about relevant tax developments, sharing planning insights, and identifying potential issues based on the information available to us.
However, your role is equally important. If you’re negotiating a business sale, considering a property purchase, planning a major investment, or preparing for a significant life change, sharing financial decisions with your CPA makes a substantial difference.
That doesn’t mean you need to call about every decision. It means recognizing when a choice could have important financial consequences and reaching out while there’s still time to plan.
When in Doubt, Start the Conversation
So, when to call your CPA? You don’t have to know whether a decision will affect your taxes before contacting your CPA. That’s something you can discuss together. Sometimes, all it takes is a simple question:
“I’m considering making this decision. Is there anything we should discuss before I move forward?”
Your CPA can help you determine whether there are tax considerations, financial implications, or planning opportunities worth reviewing.
Some decisions may require detailed planning. Others may be straightforward. Either way, having the conversation beforehand can help you move forward with greater clarity and confidence.
Strategic Thinking Starts before the Decision
The best time to seek a CPA’s financial guidance is often while you’re still considering your options. At Summit Point CPAs, we encourage you to keep us informed about important business, financial, and personal changes on the horizon.
Whether you’re preparing for a major transaction, planning your next business move, or facing an important financial decision, we’re here to help you understand the potential implications. If you’re wondering when to talk to your CPA, the answer may be sooner than you think.
Contact us to start a conversation about your plans and how we can help.
